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The bullwhip effect describes the phenomenon that the variance
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IELM 2010

,

Fall 201

6

Assignment

6

(Due at

5

P

M

,

Friday

,

Dec 9

)

Question

1

Supply Chain Management

Answer the following questions related to the supply chain management game.

(a)

What is the bullwhip effect?

(b)

If the lead time changes from 2 weeks to 3 weeks,

would the order quantity

fluctuation becomes larger or smaller.

(c)

Propose two ways to improve the bullwhip effect.

Solution:

(a)

The bullwhip effect describes the phenomenon that t

he variance of orders is greater

than that of sales, and the distortion increases

as one moves upstream

.

(b)

The order quantity would fluctuate at a larger magnitude if the lead time increases

from 2 weeks to 3 weeks.

(c)

Let the retailer share the demand information with all tiers of the supply chain.

Shorten the lead time.

Question

2

CPM

Method

The billing department of a department store prepares monthly inventory reports for use

by the store’s reports for use by the store’s purchasing agents. Given the following

information, use the critical path method to determine:

(a)

How long the total p

rocess will take.

(b)

Which jobs can be delayed without delaying the early start of any subsequent

activity

.

Job Description

Preceding

Activities

Hours

A

Start

-

0

B

Get computer printouts of customer purchases

A

10

C

Get stock records for the month

A

20

D

Reconcile purchase printouts and stock records

B, C

30

E

Total stock records by department

B, C

20

F

Determine reorder quantities for coming period

E

40

G

Prepare stock reports for purchasing agents

D, F

20

H

Finish

G

0

 

 

 

0, 10

0, 20

20, 50

20, 40

40, 80

80, 100

100, 100

0, 10

0, 20

20, 50

20, 40

40, 80

80,

100

100, 100

100, 100

80, 100

50, 80

10, 20

40, 80

20, 40

0, 20

0, 0

Solution

(a)

First, draw the

network diagram

Second, compute early start

s

and early finish

es

for the forward pass.

Next, compute late start

s

and late finish

es

for the backward pass.

By comparing early starts and late starts, we know the critical path is

A

C

E

F

G

H

The duration is 100

hours

(b)

The activities with slacks are B and D. So B and D can be delayed without delaying

the project.

Question

3

Time Cost Model

Here are the precedence requirements, normal and crash activity times, and normal and

crash costs for a construction project:

Preceding

Activities

Require Time (Week)

Cost

Normal

Crash

Normal

Crash

A, 0

B, 10

C, 20

D, 30

E, 20

F, 40

G, 20

H, 0

A, 0

B, 10

C, 20

D, 30

E, 20

F, 40

G, 20

H, 0

0, 0

A, 0

B, 10

C, 20

D, 30

E, 20

G, 20

H, 0

0, 0

F, 40

 

Available solutions